Plane Ticket Taxes

President Bush told Congress this week that he wants to fund the FAA in a new way, by killing taxes on passenger tickets and replacing them with user fees for commercial airlines.

That actually could be a more fair way to do it, depending on the details. That's because corporate jet owners don't currently pay their fair share. More than 18% of flights are business jets, but they pay just 5% of FAA fees that pay for air traffic control.

"Whether there are three or 300 passengers on an aircraft, to an air traffic controller, a blip is a blip on the radar screen," said James C. May, president of the Air Transport Association, the leading airline trade group.

However, the chairman of the House Transportation and Infrastructure Committee, Rep. Jim Oberstar (D-Minn.), doesn't want to change the system. His aide last week didn't say why. I'm sure it has nothing to do with business jet lobbyists, and am sitting by waiting for an explanation.

Look for lobbyists to be out in force. In fact, if you've ever thought you'd make a great lobbyist in the transportation area, this would be a great week to apply for a job. Next week the Transportation Dept. will spell out the nitty gritty.

Comments

I agree with George Bush and disagree with a Democrat? I must have gotten up on the wrong side of the bed this morning.

I wonder why Bush choose this issue?

Posted by: Jon | February 12, 2007 1:39 PM

It's about time someone looked at this issue! I just booked a trip to Europe this summer for myself and my 7 month old, his ticket turned out to cost $100 but the "taxes" were another $250! What's worng with this picture! Make the airlines pay!

Posted by: Kate | February 12, 2007 1:44 PM

Oh, I get it -- lets trust the airline lobby (Air Transport Association) to ensure the flying public receives fair treatment. The ATA has relentlessly attacked general aviation (not just business aviation) for years, and the user-fee issue serves as another example. Ms Loose, do you really think airlines won't pass user fees on to their customers once the ticket tax goes up in smoke? Stick to travel writing -- you know nothing about aviation.

Posted by: Minneapolis Ron | February 12, 2007 1:49 PM

Leave the tax, not like we wouldn't see it added on somehow and called something else. AND, have the corporations pay the same rate... there, max funding but for what again??? And, it is not like its the only funding source, common, its a branch of government... it must be funded...and then, put the GAO on it to make sure they use it well and wisely.

Posted by: Janet | February 12, 2007 2:11 PM

The President wants user fees because once a price structure is set, certain campaign donors who commonly align with Republicans have told him that greater privatization of the air traffic system will become more probable.

There are a number of problems with this, but the bottom line is that a company brought in to oversee a new air traffic public utility company will not make its money by increasing user fees, which will probably be set by Congress. It will increase profit margins by doing more work with less people, and paying none of its employees more than it's federally mandated to pay. If you've got unsatisfied employees and high turnover in a safety-critical job that takes years to certify new hires, you have a problem as long as you need human beings to make the calls that keep airplanes apart. There's also the issue of being too important to fail, as is the case with the country's largest banks and the Federal Reserve, that might introduce more managerial carelessness into the system once privatized.

Depending on how it's done, user fees could also be stifling to general aviation, which trains new pilots and performs services other than ferrying passengers for a price. If each takeoff and landing costs something, and then every minute of flight, then the already high costs of becoming an instrument-rated, instructor-qualified pilot become that much higher. Likewise, it'll cost cities and counties more money to contract for services like fire fighting (important to us, out West), medical evacuation flights, et cetera.

If it's limited to airplanes operating in the positive-controlled airspace above flight level 180, or 18,000' above mean sea level, then the advantage will accrue to the airplanes which seat the most passengers per blip. Airlines 1, business jets 0. But the airlines aren't just going to soak a user fee without passing it along to their customers, and the service provided won't get substantially cheaper any time soon, whether you call it a user fee or a ticket tax.

Basically, it's an idea that sounds great, until you hear about the most likely steps to follow once executed.

Posted by: John | February 12, 2007 2:20 PM

General aviation has been cheerfully paying user fees in the form of fuel taxes for decades. A move to change this to per-use or per-contact user fees will create a nightmare in fee collection and will encourage general aviation pilots to avoid using air traffic control or flight service station services. This is bad for aviation safety.

Posted by: Jim | February 12, 2007 2:31 PM

Cindy,
Unfortunately, you're falling right in where the airlines are hoping you will - into believeing their side of the story, and no one else's.
The reason that the airlines pay 3.5x as much as the little guys is that an airline flight requires services, usually a large airport, security, air traffic control, extremely precise radio equipment (for poor-weather operations), and the like, and is grounded if one of those elements are not there. The little guys operate outside of that system, and do the vast majority of it on their own - small airports lack control towers, precision instrument approaches, and so on. Each side pays for what they get, and gets what they pay for. The airlines simply see this as a power play in which they can save a few bucks for the next time they head to bankruptcy.

Posted by: Joe | February 12, 2007 6:14 PM

I've spoken with people who are very knowledgeable on this subject, and they all agree that the general aviation industry has been getting a free ride for years. AOPA is one of the most powerful lobbies in this town (which is really saying something), and they've managed to rig a system that is heavily tilted in their favor. While the issues raised by Joe may be true, the real question is exactly how much they matter, in the larger scheme of the costs of operating and maintaining the air traffic control system.

Obviously, ATA is going to push their position to another extreme, arguing that they should bear a smaller fraction of the costs than would be "fair" from a cost allocation standpoint. However, that doesn't mean that some movement in that direction isn't appropriate.

Basically, commercial airline passengers are currently subsidizing corporate jets and general aviation, to an astounding degree. How anyone could think such a system is fair (I'm guessing that the users of private planes are quite a bit better off than the average airline passenger) is really beyond me.

Posted by: JJ | February 13, 2007 10:35 AM

I've spoken with people who are very knowledgeable on this subject, and they all agree that the general aviation industry has been getting a free ride for years. AOPA is one of the most powerful lobbies in this town (which is really saying something), and they've managed to rig a system that is heavily tilted in their favor. While the issues raised by Joe may be true, the real question is exactly how much they matter, in the larger scheme of the costs of operating and maintaining the air traffic control system.

Obviously, ATA is going to push their position to another extreme, arguing that they should bear a smaller fraction of the costs than would be "fair" from a cost allocation standpoint. However, that doesn't mean that some movement in that direction isn't appropriate.

Basically, commercial airline passengers are currently subsidizing corporate jets and general aviation, to an astounding degree. How anyone could think such a system is fair (I'm guessing that the users of private planes are quite a bit better off than the average airline passenger) is really beyond me.

Posted by: JJ | February 13, 2007 10:36 AM

Nothing that puts corporate operators at a disadvantage will ever get passed. Why? Because all those Senators and Congresspersons just love hopping onto some friendly corporation's Gulfstream (probably owned by an industry the Congressperson regulates) and heading off for a weekend "fact-finding visit" to the Broadmoor or Palm Springs. If a little golf with the CEO gets thrown into the mix, so much the better.

Posted by: A Cynic | February 13, 2007 11:31 AM

-urgent-

Cindy, are you familiar with Breezes Bahamas on Cable Beach, Nassau? Do you recommend?

I am getting conflicting guidance and need to confirm ASAP!

Thank you for responding!

Posted by: off topic | February 13, 2007 12:36 PM

General aviation already pays through fuel taxes.

User fees led to privatization in Canada, which has been a disaster. Further, GA pilots can choose not to use services they would have to pay for, which will decrease safety.

Airlines always use the system, always IFR, and are the reason for congestion.

Posted by: AJ | February 13, 2007 3:12 PM

I saw one opinion piece that cast this in terms of wear and tear on facilities. Airlines do cost a lot and should definitely bear the brunt of the taxes/fees, but business jets take up just as much ATC and runway time as a bigger jet and pay a tiny fraction of the taxes. Around certain events, they can be a cause of major airport backups. I don't know enough about the general aviation situation or the smaller airport situation to comment, but it does sound to me like the current system is too easy on business jets.

Posted by: SPC | February 13, 2007 3:45 PM

I believe there is already a huge sum of money in the "Aviation Trust Fund", being the cash from all those taxes and other charges we've been paying for the last decade or so. The problem is that Congress won't let the FAA use it because that money helps hide the true size of the deficit. So how does getting more or different money help if the money we already have can't be spent? I cringe sometimes when I see just how badly the Congress manages money and how we just keep sending these incompetents back to keep doing the same thing, year after year.

Posted by: Peter | February 15, 2007 6:29 PM

We need to start to tax the poor people that use their private airplanes. Time for those poor,poor people to pay their fair share.

Posted by: jerryinthenorth | February 16, 2007 10:07 AM

We need to start to tax the poor people that use their private airplanes. Time for those poor,poor people to pay their fair share.

Posted by: jerryinthenorth | February 16, 2007 10:08 AM

If the airlines truly want a "fair" system, then I'm sure they won't mind sharing their government subsidies equally with all aircraft owners. If all owners are paying their "fair share", then GA aircraft should be able to use the government paid for terminals and parking spaces which the airlines enjoy. The same security, the same priority, the same fuel tax rate. Using the same line of thought, I'm sure all of you driving personal cars, luxurious or not, believe you should be paying the same fees and rates as large commercial motor vehicles. GA does pay its fair share through its higher fuel tax rates. The bigger the plane then the bigger the fuel tax bill (airliners excluded).